Hello everybody!
In this video, I’ll tell you about Bitcoin - what it is, how to mine it, and what bitcoin
wallets to use for storing it.
Bitcoin, digital currency or cryptocurrency is only the lines of a computer code that
have certain monetary value.
It is a form of digital money created by mathematical calculations and controlled by millions of
computer users known as miners, but it has no physical form.
Bitcoin mining There are two basic ways of mining Bitcoin
nowadays: • one way (internal mining) suggests having
individual computer equipment or collective clusters also known as pools;
• the other way (external mining) is the cloud mining that makes use of leased hashing
power.
These are not two different methods, but only two parallel directions.
Their main principles are the same, and they are regulated by the Bitcoin hashing algorithm.
Talking of the first type, internal mining: Theoretically, anyone can mine Bitcoins as
long as they have a powerful computer.
In this case, the computer should work around the clock on intensive computation tasks.
Every task has a set of possible 64-bit solutions.
However, with an average consumer-class PC you are going to spend more on electricity
than you can earn in bitcoins.
Nowadays, Bitcoin mining is rarely about using one device, but more and more cryptocurrency
is produced in pools.
This method suggests distribution of computation tasks between several users, and they also
have to share their reward for every block in proportion to their capacities.
For a large miner using several powerful computers, the reward can be higher, but it requires
really powerful hardware.
Meanwhile, mining can be done in one of the following ways - with the central processor,
the graphics card or the ASIC chips.
A miner device is a technical solution which is much more profitable than a powerful computer.
They are based on ASIC chips - microprocessor modules developed specifically for mining.
In addition, I should say that for successful mining you should have a specialized device
(ASIC miner) or a farm made of several graphics cards.
On the contrary, you’re not going to produce any Bitcoin worth mentioning as long as you
use your computer’s CPU or GPU, or even a smartphone.
At best, they can only earn you several dollars a month.
Watch this video till the end and you’ll know why.
Bitcoin wallets However, let’s begin with simple things.
Before you can start mining bitcoins, the first thing you need is a wallet.
This wallet is a small personal database stored in your computer, smartphone, tablet PC or
somewhere in a cloud storage.
You can keep your bitcoins online (in a cloud service) or offline (on a hard disk or USB
drive).
We recommend the offline option for anyone having more than 1 or 2 units of this cryptocurrency.
There are also special devices, known as offline wallets.
Why do you need a Bitcoin wallet?
If you are planning to mine bitcoins or use them to receive payments or make them, you
can’t do it without a wallet.
Also, any mining software will ask you for a bitcoin address where results of your work
will come in the form of a cryptocurrency.
There are many kinds of wallets.
Here are some recommended for beginners: Blockchain – a website to create your online
wallet.
As for me, it’s the simplest way, just what a beginner needs.
It is very easy to create a wallet there.
Enter your email address, password and agree to the service agreement.
That’s all, your wallet is ready to use.
It is meant to work with Bitcoin, Ether and Bitcoin Hash.
You can use it to make or receive payments in these currencies.
To see the wallet address, click on the “Request” button.
It will be shown in the field “Copy and Share Address.”
Electrum is a tool to use on a computer.
It works with Windows, Mac and Linux.
• Just download and install it on your computer.
• Specify the wallet name.
• Set the security level: Standard wallet, protected by a password
only Wallet with two-factor authentication
For multi-signature, you will have to install Electrum on one more device, for example,
a smartphone.
The last option allows viewing the necessary bitcoin address.
Choose any variant.
You should remember that the standard wallet is the least secure.
• I choose a wallet with two-factor authentication • Create a new seed, which will help you
to restore access to your wallet in case of a system failure or loss of your device.
• Paste the suggested phrase in the next window
•
Set the password for the wallet.
View the path to the wallet in the next window.
• Enter your real email address •
In the next window, you will see a QR code which you should scan with Google Authenticator
app on your smartphone.
Then enter the generated code into the field.
• That’s all, your wallet is ready to use.
In fact, all settings are easy to use.
The entire wallet history will be shown in the History tab.
To send the money, go to Send tab.
You can confirm receiving money by going to the tab Receive.
The recipient address here is the address of this wallet.
Both of the described wallets have versions for mobile devices.
I will give the links to their official websites in the description.
As I have already mentioned, if you’re planning to earn a lot from mining, it would be advisable
to buy a hardware wallet which is safer than an online wallet.
These are such devices as: • KeepKey:
• Ledger Nano S: • Trezor:
• Digitall Bitbox:
Find their purchase links in the description as well.
Mining software Now let’s move on to the most interesting
part.
The powerful hardware influences largely the speed and effectiveness of mining.
However, the mining software is just as important.
• If you are a solo miner, this software connects your mining farm to the blockchain
of other miners.
• If you have a pool, it will connect you to a particular pool.
• If you are using a cloud service for mining, you won’t need any software.
The main task of such software is to connect the mining hardware to the bitcoin mining
network.
Mining software controls miner input and output, shows mining statistics, fan speed and temperature.
Here are some examples: Let’s begin with the twins - such tools
as BFGMiner and CGMiner, whose interface looks like that of the command prompt.
BFGMiner BFGMiner is the option for people who value
reliability and convenience.
The advantages include mining with FPGA and using graphics card power.
CGMiner This one is probably the most well-known and
popular tool for today’s miners.
It’s based on CPU Miner source code.
This software has lots of functions, such as controlling fan speed, remote management,
self-detection of small database blocks, and multi-GPU support.
Such programs are controlled via the Command Prompt:
• Start the program • and enter the URL address of the pool
you are using into the field.
Before doing that, you should sign up to a pool you have selected for mining.
• In my case, this is Antpool.
You will find the link in the description: https://www.antpool.com/support.htm
• In the field Username, enter the login you use for this pool.
• And the password • In my case, there are no mining devices
connected to my computer, and this is what the program tells me.
• If any such device (a miner or a graphics card) is connected, the program will detect
it.
If there is no such device – press M and +, as the program prompts you.
CGMiner is built on a similar principle.
I will give the links to webpages of the mentioned programs in the description.
If you are only taking your first steps in mining, the products I described above will
be difficult enough to confuse you.
The following Bitcoin miner software should be more appropriate for novice users, which
doesn’t mean, however, that more experienced users can’t use them as well:
EasyMiner EasyMiner is based on a graphical interface
and it also works as a convenient shell for BFGMiner and CGMiner that I mentioned before.
This software supports network bitcoin mining protocols as well as stratum mining protocol.
It can be used for solo mining, and for mining in groups as well.
If you go to EasyMiner settings, you can see that you can mine some cryptocurrency with
your graphics card (GPU Miner), your processor (CPU Miner), or a specialized mining device
(ASIC Miner).
Just set up the preferred method and click the button “Start mining.”
Let’s set up mining with the processor of my computer and see what happens:
• Here are my system specifications.
• In the CPU Miner menu, I will enter the data from my Antpool account.
• I specify the worker name and password •
The pool address and port • Now I go to the menu to click “Start
mining.”
• The process starts.
• If you look at the Task Manager, you can see that the CPU load is 100%.
However, pay attention to the hash rate per second of this processor.
It says 4 - 4.5 kH.
It’s very little.
Here’s the conclusion: even if you use the computer’s processor (even a quad-core like
I do), there’s not much Bitcoin to mine...
It is not effective at all.
Nicehash Nicehash is just the tool for a novice user
to get the essence of cryptocurrency mining.
It’ a pool and a mining tool at the same time.
To start mining with Nicehash:
• download and install Nicehash Miner.
You will find the link in the description: • Add your wallet to the application by
clicking on the Wallet button.
I’ve already used NiceHash Miner before, so that’s why my wallet has a positive balance.
• Add a worker.
Name it as you like.
• In the settings, select the currency in which you want to view the amount of Bitcoin
you have mined.
• Set up auto start and fan management • And the last step before starting work
is to test the devices available on this computer.
To do it: in the section Available devices click
on Hardware details and you’ll see the list of available
processors and graphics cards.
In my case, this is the CPU. click “Benchmark all” and select the
test type (any).
The program will test its performance.
• After that, go back to the main window and click “Start.”
• The mining process starts.
• The main window will show your mining results.
• also, it shows the expected mining results per day, with the present conditions.
• Following the link View Stats Online will take you to your Nicehash account.
There, you can see your account statistics and withdraw funds.
I will give the links to webpages of the mentioned programs in the description.
Another type of mining is about the services that use the web interface of your browser.
I’d like to draw your attention to BTCMiner.
It must be the easiest mining tool of all.
It’s available in the web interface and it doesn’t require installation of any programs.
Just go to the service’s webpage, enter the wallet address into the special field
and click the button “Start mining.”
The idea is that your browser starts mining Satoshi units just before your very eyes.
Well, I wouldn’t recommend thinking too much about such services, as their working
principles look uncertain.
There are rumors that they don’t let you withdraw any funds.
Find the link to BTCMiner in the description:
These are only a few mining tools.
As there are quite many of them, I won’t be describing each of them in detail.
This is a topic for a special video.
Now here are my conclusions on the issue.
To make mining successful and profitable, you’ll need to create your own mini-farm
or a pool of several graphics adapters.
Ideally, it could be a specialized device, an ASIC miner.
Neither central nor the graphics processors of your home PC (leave alone your smartphone)
are good for any profitable mining.
Their effectiveness looks miserable.
That is all for now.
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Leave comments to ask questions.
Thank you for watching.
Good luck.
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